How to Tame an InflatedEntertainment Budget

You probably spend more on entertainment than you do on groceries, clothing or gasoline.

If you don't believe it, take a few minutes to total your monthly costs, starting with the services that have you locked in: basic cable television, and any premium channels, like HBO or Showtime; Netflix to rent videos; TiVo for digital recording; your high-speed Internet connection; and perhaps, satellite radio and streaming music like Yahoo Music. You are already up to about $200 a month, or $2,400 a year.

Among the affluent, the 20 percent of households with more than $77,000 a year in pretax income, more money is spent on entertainment -- $4,516 a year -- than on health care, utilities, clothing or food eaten at home.

The average income of households in that quintile is a little more than $127,000. Because they account for a disproportionate share of spending in the economy, they are the group that trend watchers and marketers focus on. (From the unexplained fact department: People in the western part of the country spend about 20 percent more on entertainment than the national average, the government statisticians also show.)

Over the last 10 years, outlays for entertainment outpaced overall expenditures. Spending on health care and education, which almost doubled in that period, grew faster.

Entertainment budgets will only grow larger. With a proliferation of electronics like giant flat-screen TV's, video iPods and devices to send music, photos and video from room to room in your house, not to mention a proliferation of services to deliver entertainment on cellphones and laptops, you will be opening your wallet more often.

How do you get a handle on it?

Take up shadow puppets, perhaps, and enjoy good conversations in front of the fireplace?

Not likely; for all the talk of the Information Age, we are really in the Entertainment Age, where our lives are centered on the pursuit of happiness. Nevertheless, innovation may actually offer ways to trim costs, if technology does not first spur us to consume ever more entertainment.

Consider Netflix. Before Reed Hastings came up with the idea of mailing DVD's in a flimsy red envelope, your only option was renting movies at the neighborhood video store for $3.50 a pop (before sales tax).

Netflix charges a flat fee of $17.99 plus tax a month for all the videos you can watch. If you watch six DVD's a month, you are doing better than the video store. Watch enough of them and you can drive the cost below 75 cents a movie and save $120 a month over going to a video store. The trick is, of course, to watch the movies right after receiving them and return them as quickly as possible.

A middle school science teacher in Seattle, Justin Baeder, wondered whether he saved very much getting his DVD's through the mail. So he created an Excel spreadsheet that calculates exactly how much he does save. It turned out to be just a little, about $6 a month, but he loves Netflix and keeps using it.

He's posted the calculator on his Web blog, the Republic of Geektronica at www.geektronica.com. All you need to do is download it and paste your Netflix rental history, which Netflix provides on its site, into the spreadsheet.

Netflix's success -- it now has 3.6 million subscribers -- has attracted other entrepreneurs to its business model. For $15 a month, Gamefly sends two video game discs for any of the game machines like the Microsoft Xbox and the new Xbox 360, DS from Nintendo or PSP and PS2 from Sony. As with Netflix, as soon as you send one back, you are sent another one.

A subscription looks pretty smart when you consider a new game costs as much as $50 and your children (O.K., you) get bored with it after eight hours of play.

Another option is to buy used games from stores like EB Games or GameSpot. (New releases show up quickly and go for about half price.)

The game industry is trying to push prices higher for the hottest games, to as much as $60, but even at that price, on a dollar-to-minutes-of-enjoyment basis, video games may be one of the best values, about 12.5 cents a minute for the easily bored, or fractions of a penny for those who can play "Half Life" their whole life.

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Live opera works out to about 37 cents a minute, for a middling seat in the New York Metropolitan Opera house to hear "Aida," compared with 7 cents a minute for "Harry Potter and the Goblet of Fire" at a Loews Cineplex.

But a Gwen Stefani concert, in again, middling seats, is about $1.25 a minute and that's with a serving of Black Eyed Peas thrown in.

If you accept statistics that the average American's TV is on eight hours a day, a $100-a-month cable bill is really only a bit more than half a cent for each minute of entertainment.

Yahoo Music adopted the subscription model as well. Instead of paying 99 cents to download a song on iTunes, Yahoo charges $5 a month, if you pay for a year's subscription upfront, so you can download as many songs as you want onto your computer or MP3 player.

It's cheaper than iTunes, though the selection of music isn't as extensive. Napster and RealNetworks have a similar service.

There is a rub. As long as you keep paying the subscription, Yahoo lets you keep the music; when you stop, the music stops. In fact, it will disappear right off your computer.

That is the genius of subscriptions. But in Yahoo we also see just how costly the reliance becomes. Just a few months after starting the service, Yahoo doubled the price. If you don't pay it, you lose the music. That may be one reason it has been slow to catch on despite being cheaper than iTunes.

Here's a tip: If you want to put payment of your subscriptions on automatic, use a credit card rather than have payments deducted straight from a bank account. It's easier to manage credit card payments and it may be easier to monitor for price increases.

But we've only been nibbling around edges so far. It's the D.S.L., cable and phone bills that are bleeding you. The Federal Communications Commission recently studied cable prices and found that in those areas with competition, fees rose 3.6 percent in 2003 compared with a rate of 5.6 percent in those regions without competition. In the 1990's, they were sometimes rising as much as three times the rate of inflation.

The cable industry says that rate increases have moderated so that they now are just a bit more than the overall rate of inflation and wage growth.

A new pricing system may offer some temporary relief. Since cable companies offer Internet service and phone service, Internet service providers offer phone service, and phone companies offer cable TV and Internet service as well as cable TV services over the Internet, they are trying to lock up consumers in this new topsy-turvy world with bundled services.

It is called triple play or quadruple play (four-play presumably being too racy), and it offers some advantages to consumers. Sprint Nextel recently announced a joint venture with five of the largest cable TV companies to offer a co-branded wireless device next year that will stream video over a wireless network.

SBC Communications, soon to be renamed AT&T, says that 66 percent of its customers already have some form of bundled service, usually phone and Internet service. It is offering a "super bundle promotion" of D.S.L. Internet service, satellite TV and long-distance phone service for $100. One can also throw Cingular wireless phone service into the bundle. It claims that a consumer can save $89 to $179 a month depending on the level of phone service they get.

Companies are finding that because consumers perceive a value, they end up upgrading to higher tiers of service.

"There is a barrier to exit," admitted Frank Mona, executive director of consumer marketing for SBC, "but it is not huge. In this competitive environment, we can't afford not to do that."

Of course not. As long as we get more entertainment, we'll pretend not to notice.

PERSONAL BUSINESS: YOUR MONEY E-mail: yourmoney@nytimes.com

Correction: November 22, 2005, Tuesday A chart in Business Day on Saturday with an article about how much people spend on entertainment misstated the amount spent on "food eaten at home" in the top income quintile. It was $4,503, not $9,039 (which is the total spending on all food in the top quintile).